MINISTER OF TRADE, INDUSTRY AND COMPETITION WELCOMES VOLKSWAGEN’S R4 BILLION INVESTMENT IN SOUTH AFRICA

April 16, 2024

The Minister of Trade, Industry and Competition, Minister Ebrahim Patel, has lauded Volkswagen South Africa’s (VWSA) bold move to inject R4 billion into their assembly plant in Kariega, Eastern Cape. This substantial investment aims to introduce a new model to the production line, an SUV based on the Polo platform, solidifying the facility’s status as the exclusive manufacturer of the Polo brand worldwide. The SUV model is slated for export to global markets, further enhancing South Africa’s automotive footprint on the international stage.

Addressing the audience at VWSA’s Kariega facility, Minister Patel hailed the investment as a testament to the success of South Africa’s industrial policy, underpinning the livelihoods of approximately 3,500 individuals directly employed by VWSA. Moreover, the investment is expected to catalyze economic growth, supporting an estimated 50,000 indirect jobs and livelihoods in the Eastern Cape region.

Over the past five years, the South African government has spearheaded initiatives to bolster the automotive sector, positioning it as a vital contributor to the nation’s economy. Minister Patel outlined ten pivotal actions taken by the Sixth Administration to bolster the industry, including the implementation of a new Automotive Masterplan, forging trade agreements, establishing transformation funds, and incentivizing electric vehicle adoption.

The automotive industry remains a cornerstone of South Africa’s manufacturing sector, contributing significantly to GDP and employment. In 2022, the manufacturing component of the auto industry accounted for 2.9% of South Africa’s GDP, with over 115,000 direct employees and an additional 240,000 indirect jobs. Despite global challenges such as the COVID-19 pandemic and supply chain disruptions, South Africa’s automotive sector has exhibited resilience, with a record number of vehicles exported in 2023, marking a milestone in the nation’s industrial prowess.

Volkswagen’s substantial investment underscores the confidence of international automakers in South Africa’s automotive capabilities and reaffirms the nation’s position as a competitive player in the global automotive arena. With continued government support and industry innovation, the future of South Africa’s automotive sector appears promising, poised for sustained growth and prosperity.